Meta Platforms (NASDAQ:FB) stock is under pressure. It has fallen over 44% this year and touched a new 52-week low of $187.28. Meanwhile, Meta stock has lost over 50% of its value in six months.
The general market selling amid macroeconomic and geopolitical concerns, a slowdown in growth, and higher competitive activities led to this significant correction in Meta Platforms stock.
It’s worth noting that Facebook’s daily active user growth is decelerating on a quarter-over-quarter basis. Further, its daily active user base declined in Q4 (on a sequential basis) amid increased competitive activity.
Besides increased competition, Apple’s (NASDAQ: AAPL) privacy changes, a shift towards short-form videos (slower to monetize), the negative impact on ad spending due to the slowdown in e-commerce growth, and supply-chain headwinds are taking a toll on Meta Platforms’ financial performance.
Now What?
Meta Platforms expects Apple’s privacy changes will likely have a negative impact of $10 billion on its financials in 2022. Meanwhile, its daily active user growth could remain muted in the near term as the company faces heightened competition from TikTok. Also, the activity shift towards Reels (short-form videos) remains a drag.
It means that FB stock could remain volatile in the short term, especially amid the current macro and geopolitical environment.
Meta Platforms’ Reels and monetization rates face headwinds in the near term, noted Morgan Stanley analyst Brian Nowak. The analyst lowered his revenue and EBITDA estimates for FY22 and FY23 and cut his price target to $325 from $360. However, Nowak maintained his Buy recommendation.
Besides Nowak, Jefferies analyst Brent Thill also recommends a Buy on FB stock. While he acknowledges that FB faces headwinds in the short term, he believes that the negatives are already reflected in FB stock, and its valuation looks attractive post the recent selloff.
FB Price Forecast
Due to the correction in price, FB’s stock price forecast on TipRanks shows considerable upside potential. The average Meta Platforms price target of $331.13 indicates 76.6% upside potential to current levels.
Meanwhile, FB stock has a Moderate Buy consensus rating based on 31 Buy, 12 Hold, and 1 Sell recommendations.
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